Bill would force review of $8 billion in Ohio tax breaks

Wednesday

Nov 30, 2016 at 11:52 AM

Jim Siegel

The latest attempt to force Ohio officials to seriously examine the more than $8 billion worthof tax credits, exemptions and deductions the state provides each year hit at least a temporarysnag Tuesday.

Various lawmakers over the years have talked about the need to study and potentially alter theso-called tax expenditures that have such a major impact on state revenues. But the talk generallyhas not produced action " most of the tax breaks are fiercely guarded by various interests.

House Bill 9 would formally study the tax expenditures.

The bill would create a bipartisan review committee, with six lawmakers and a member of theDepartment of Taxation, to review each of Ohio's 128 tax expenditures at least once every eightyears. The committee would issue a report with each new budget on whether the expenditures areperforming their economic goals, and recommend changes or elimination.

'Allowing poorly performing tax expenditures to exist in perpetuity is not sound tax policy,'Rep. Terry Boose, R-Norwalk, has testified in committee, urging passage of a bill he's worked onfor six years. 'Tax expenditures that are no longer fulfilling their original purpose only serve tonarrow the tax base and prevent broad-scale reductions in rates.'

Boose has argued that tax expenditures generally get little scrutiny to determine whether theyare actually accomplishing their intended purpose " and once started, they are difficult toend.

The bill passed the House unanimously in June 2015, and then passed the Senate unanimously inMay 2016. But there was a hiccup, and the House voted on Tuesday to reject Senate changes to thebill.

Before the Senate vote, GOP leadership and Sen. Bill Coley, R-West Chester, added an amendmentto the bill that would add more legislative scrutiny to Department of Administrative Servicespurchases made by sealed competitive bid.

Gov. John Kasich, who has proposed eliminating some tax breaks in his prior budgets " though GOPlawmakers often rejected them " opposes the amendment. Boose said it adds a 'redundant layer ofbureaucracy.'

However, both Boose and Coley said they were optimistic the bill could still be worked out in aconference committee and given final approval next week.

It is supported by both the conservative Buckeye Institute and the liberal Policy MattersOhio.

In other legislative action, the House voted 81-13 to approve a bill prohibiting the state fromcontracting with a company that is boycotting Israel or disinvesting from Israel.

Rep. Kirk Schuring, R-Canton, who was among the lawmakers who took a trip to Israel last year,called it a 'beacon of democracy in a very tumultuous part of our world.'

Schuring said House Bill 476 is about making sure the state isn't indirectly doing anything thatcould harm Ohio's relationship with Israel.

'It has nothing to do with one's First Amendment right,' Schuring said. 'It is just saying thatIsrael is a valuable trading partner and valuable ally.'

But Rep. Mike Curtin, D-Marble Cliff, said boycotts are a peaceful way to try to influenceIsraeli policies in the Palestinian territories it occupies.

The bill 'would use the strong arm of the state to punish many good and faithful Ohioans whoare doing nothing more than exercising their liberty rights of conscience,' he said. The state canexpress support for Israel 'short of creating an economic blacklist of companies that dared toexercise their liberty rights.'

The House also amended the bill, doubling what the state treasurer is allowed to invest inforeign bonds, from 1 percent to 2 percent of the state treasury.

Rep. Kevin Boyce, D-Columbus, a former state treasurer, supported the change but warned that ina multibillion-dollar portfolio, it's a big deal. 'If something were to happen in that part of theglobe those funds are at risk.'

The bill now goes to the Senate.

jsiegel@dispatch.com

@phrontpage

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